How a startup with a pouch of cells looks to change diabetes, other diseases

Crystal Nyitray just wants cells to be happy.

With a membrane pouch and a small seed round, her young company believes it has found a way to keep cells safe, happy and at the ready to treat patients with a range of chronic diseases, including type 1 diabetes.

"This opens the door to use cells as molecular factories," said Nyitray, who started working on the idea of implanting pouches of cells in the body as a Ph.D. student in the lab of bioengineering pioneer Tejal Desai at the University of California, San Francisco.

This is how it works: The quarter-size pouch, which can be implanted just under the skin pretty much anywhere in the body, protects its payload of pancreatic islet cells, in the case of diabetes patients, from being attacked by the immune system. Yet at the same time, the pouch is made of a material that is "nanoporous" enough to allow the cells to measure blood sugar and secrete insulin, which allows the body to process glucose for energy.

"The key is helping the cells survive, function and do what they do best," Nyitray said. "The pouch helps cells be happy."

It sounds easy enough; it isn't. But when Nyitray initially approached Desai about the idea, the UCSF professor was blunt. "She said, 'Crystal, people have been thinking about how to make cells happy for a long time. What are you doing differently and what are you trying to help," Nyitray recalled.

So Nyitray and partner Grace Wei, a developmental stem cell biologist, went to work on the encapsulation technology. They formed Encellin in 2016 and set up shop in various incubators and accelerators and then renowned accelerator Y Combinator.

In between, Nyitray evaluated external science and partnering at drug giant Sanofi SA and helped other companies form as entrepreneurship program manager through the "Startup in a Box" program at the University of California's QB3 biotech commercialization program.

Today, Encellin has five full-time employees, Nyitray said, and operates out of the former MedImmune building in the Valley Research Park in Mountain View. It raised its $5.9 million seed round recently, led by Khosla Ventures and SV Latam Capital, with participation by Sandhill Angels and Y Combinator.

The money will help Encellin move its plans forward, though Nyitray won't give a timeline for when Encellin hopes to start clinical trials in humans. But the pouch technology can be applied to hypocalcemia — a condition where the blood has too little vitamin D, a common affliction of kidney dialysis patients — and hypoglycemia, where blood sugar is lower than normal.

"We're looking to move as quickly and safely as possible," Nyitray said about the company's clinical plans. "We want to make sure we're doing the right thing for the patient."


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Encellin Closes $5.9M Seed Financing Co-Led by Khosla Ventures and SV Latam Capital

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Grace Wei’s Journey from Academia to Encellin Co-Founder and Entrepreneur